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NTL TO ACQUIRE COMCAST FOR $600M, FACES CABLE LONDON BATTLE

After months of trying to snare Telewest Communications Plc, NTL Inc is now looking elsewhere for a takeover candidate, and has a definitive agreement to acquire Comcast UK Cable Partners UK Ltd in a deal worth around $600m. Comcast, the UK subsidiary of Philadelphia-based cable TV company Comcast Corp, is the UK’s third biggest cable company, just behind Telewest, and also offers telephony services. The combined companies would reach 1.3m homes in the UK. But New-York listed NTL, which concentrates on the UK market, still faces a battle with Telewest over Cable London Plc, joint-owned by Comcast UK and Telewest, and one of Comcast’s biggest assets. Telewest told the London Evening Standard that the merger would give it the right to acquire the whole of Cable London along with part of Cable Birmingham, in which Comcast owns a 27.5% stake. The merger is an event which triggers our right to acquire, a spokesperson told the paper. Comcast also owns 100% of Cambridge Cable and Teeside Cable. NTL, which built up a war chest of $875m of funds to expand its cable operations last August (CI No 3,227), wants to try and emulate Cable and Wireless Communications Plc the result of a four way merger between four smaller UK cable companies last year. Long term success in this market will require greater size and market presence than Comcast UK has in its asset base, said Comcast president Brian Roberts. Comcast UK shareholders will receive 0.3745 shares of NTL common stock for each one of Comcast UK Class A or Class B common stock, unless the share price falls too low, in which case Comcast has the option to terminate the transaction. US West Communications Inc is set to have set a deadline of end February to decide whether to make a bid for Telewest, in which it holds a 27% holding (CI No 3,329).

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CBR Staff Writer

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